How Berkshire Hathaway Makes Money

Insurance is its largest source of earnings before taxes

Reviewed by Khadija Khartit

Berkshire Hathaway Inc. (BRK.A; BRK.B) is a diversified holding company whose subsidiaries engage in insurance, freight rail transportation, energy generation and distribution, services, manufacturing, retailing, and other activities. Berkshire also holds a large portfolio of equity securities and derivatives, which heavily impact the company’s reported financial performance.

The company’s list of competitors reflects Berkshire’s diverse family of businesses and includes insurance companies All State Corp. (ALL), Progressive Corp. (PGR), and Jefferies Financial Group Inc. (JEF); freight rail companies Union Pacific Corp. (UNP) and CSX Corp. (CSX); and utility and electricity companies General Electric Co. (GE) and NextEra Energy Inc. (NEE). Berkshire also competes with various manufacturers and retailers.

Key Takeaways

• Berkshire Hathaway owns businesses in insurance, rail transportation, energy generation and distribution, manufacturing, and retailing.
• The company is also a large stakeholder in many prominent companies in the U.S., such as American Express and Coca-Cola.
• Insurance generates the most revenue as well as the most earnings before taxes.
• In Jan. 2024, Berkshire announced that it had purchased the remaining 20% interest in Pilot Travel Centers LLC (PTC) on top of its previous stake, making Berkshire the sole owner of PTC, owning 100% of the company.

Berkshire Hathaway’s Financials

Berkshire announced in May 2025 its financial results for its first quarter of 2025, which ended March 31, 2025. Total revenue for the quarter was $89.725 billion, slightly lower than the first quarter of 2024. Net earnings were $4.672 billion, significantly less than $12.702 billion in earnings during 2024’s first quarter.

As of changes made to GAAP in 2018, the company is required to include unrealized gains and losses arising from changes in its investment portfolio in its reported earnings. This accounting change contributes to the company’s earnings being significantly more volatile than they otherwise would be.

Berkshire’s net income attributable to its shareholders was $4.602 billion during the first quarter of 2025, slightly lower than overall net income. Earnings before taxes (EBT), which the company uses as a profitability metric for its individual business segments, was $5.148 billion, with an income tax expense of $476 million. These numbers were far lower than the first quarter of 2024.

While the company generated solid revenues from its insurance and railroad, utilities, and energy businesses, its losses on investments resulted in a big hit to income. Berkshire Hathaway reported $6.435 billion in investment loses during the 2025’s first quarter.

Berkshire Hathaway’s Business Segments

Berkshire provides a breakdown of seven major business segments for revenue and EBT, a measure of profitability before income taxes. Total revenue and EBT for these segments in Q1 2025 were $88.959 billion and $5.148 billion, respectively, which does not include gains and losses from Berkshire’s portfolio of investments and derivatives.

To reconcile the company’s total business segment revenue with its total consolidated revenue mentioned in the above section of this article, a “corporate, eliminations, and other” adjustment of $766 million must be added to the business segment revenue.

The below results look at revenue before taking into account “corporate, eliminations, and other,” and EBT before taking into account investment losses.

Insurance

Berkshire’s underwriting businesses include:

• GEICO, private passenger automobile insurance
• Berkshire Hathaway Primary Group, property and casualty policies for commercial accounts
• Berkshire Hathaway Reinsurance Group, for excess-of-loss, quota-share, and facultative reinsurance
• The insurance business also includes investment income

Revenue grew to $25.375 billion in Q1 2025 from $24.638 billion in Q1 2024. However earnings before income taxes declined to $5.283 billion from $6.478 billion. In Q1 2025, revenue from underwriting represented $21.804 billion and EBT $1.722 billion.

BNSF Railway

Burlington Northern Santa Fe (BNSF), Berkshire’s freight rail transportation business, operates one of the largest systems in North America. BNSF Railway ships coal as well as consumer, industrial, and agricultural products.

BNSF Railway’s revenue grew slightly from $5.660 billion in 2024’s first quarter to $5.720 billion in the first quarter of 2025. EBT also grew slightly to $1.603 billion from $1.519 billion.

Berkshire Hathaway Energy

Berkshire Hathaway Energy is a global energy company with subsidiaries that generate and distribute energy and engage in real estate brokerage activities.

The segment’s revenue also grew slightly in Q1 2025 relative to Q1 2024, from $6.277 billion to $6.356 billion. This segment is expense heavy, and EBT came in at $723 million, a large gain compared to $432 million in 2024’s first quarter.

Manufacturing

Berkshire’s manufacturing businesses fall into three categories: industrial products, building products, and consumer products.

Manufacturing revenues improved in Q1 2025 when compared to the same period in 2024. However, earnings before taxes declined. Revenue for Q1 2025 came in at $18.766 billion, while revenue for that quarter in 2024 was $18.529 billion. Earnings before taxes were $2.716 billion down from $2.914 billion in 2024’s first quarter.

McLane Company

McLane is a wholesale distributor that serves businesses in both the retail and restaurant space. It’s main business categories are grocery and convenience store distribution, and food and beverage distribution.

Revenue fell for McLane when comparing 2025’s first quarter to the first quarter of 2024. Sales were $12.175 billion, down from $12.475 billion. However, earnings before taxes was up during the same period, from $165 million in Q1 2024 to $181 million in Q1 2025.

Pilot Travel Centers (PTC)

PTC operates travel centers in North America under the brand names “Pilot” or “Flying J” and has more than 750 travel centers across 44 states and six provinces in Canada. The company is also involved in wholesale fuel and fuel marketing platforms.

Similar to other business segments Pilot saw revenue decline, but EBT growth when comparing the first quarter of 2025 to the same quarter in 2024. Revenue went from $12.503 billion to $10.430 billion. Earnings before taxes grew from $70 million to $168 million.

Service and Retailing

The service businesses include grocery and food service distribution, professional aviation training, fractional aircraft ownership, and distribution of electronic components as well as media businesses and logistics businesses.

The retail businesses include automotive products, home furnishings, and other operations that sell various consumer products.

This segment grew both revenue and EBT when comparing Q1 2025 and Q1 2024. Revenue went from $9.703 billion to $10.137 billion, while earnings before taxes went from $908 million to $941 million.

Investment and Derivative Gains and Losses

Berkshire Hathaway also owns a large portfolio of equity securities and derivatives. Its concentrations are in Apple Inc. (AAPL), Bank of America Corp. (BAC), Coca-Cola (KO), Chevron (CVX), and American Express Co. (AXP). The portfolio posted a loss of $29.8 billion in Q3 2023, compared to a loss of $13.5 billion for the same period in 2022.

Berkshire Hathaway’s Recent Developments

In Jan. 2024, Berkshire announced that it had purchased the remaining 20% interest in Pilot Travel Centers LLC. The company now owns 100% of PTC as it had purchased stakes in the company previously.